PT Indosat Tbk 9M 2015 Results PT Indosat Tbk – 9M 2015 Results
PT Indosat Tbk
9M 2015 Results
PT Indosat Tbk – 9M 2015 Results
Agenda
PT Indosat Tbk – 9M 2015 Results
Financial and Operational Highlights
Management Focus and Key Updates
Supplemental Information
Financial and Operational Highlights
PT Indosat Tbk – 9M 2015 Results
3Q15 QoQ Overview
Consolidated Revenue increased 6.7% from IDR 6,527 billion to IDR 6,962 billion
EBITDA increased 16.2% from IDR 2,758 billion to IDR 3,205 billion, EBITDA Margin reached 46.0%
Loss Attributable to Owners of The Parent increased from a loss of IDR 278 billion to a loss of IDR 389 billion
Free Cash Flow decreased from IDR 1,096 billion to IDR 1,051 billion
PT Indosat Tbk – 9M 2015 Results
9M15 YoY Overview
Consolidated Revenue increased 10.5% from IDR 17,717 billion to IDR 19,582 billion
EBITDA increased 12.8% from IDR 7,593 billion to IDR 8,568 billion, EBITDA Margin reached 43.8%
Loss Attributable to Owners of The Parent decreased from a loss of IDR 1,330 billion to a loss of IDR 1,122 billion
Free Cash Flow increased from IDR 2,551 billion to IDR 2,629 billion
PT Indosat Tbk – 9M 2015 Results
Financial Highlights
Operating Revenue
EBITDA
EBITDA Margin
Loss Attributable to Owners of the Parent
19,582
9M-14* 9M-15 YoY
10.5%
8,568 12.8%
43.8% 0.9ppt
-1,122 -15.6%
6,962
2Q-15 3Q-15 QoQ
6.7%
3,205 16.2%
46.0% 3.7ppt
-389 39.6%
in IDR billion
17,717
7,593
42.9%
-1,330
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
• Momentum on revenue growth YoY continued followed by EBITDA • Network Modernization completion continued to lead YoY revenue growth
PT Indosat Tbk – 9M 2015 Results
6,527
2,758
42.3%
-278
845 887 916 900 935 921
281 292 262 290 271 273
in IDR billion
4Q-14
+6.7% QoQ +14.0% YoY
1Q-15
5,840
3Q-14 2Q-14
Cellular Fixed Data Fixed Voice
+0.6% / -6.7%
-1.5% / +3.9%
+8.4% / +17.1%
QoQ / YoY
4,714 4,925
6,104
2Q-15
5,190
6,368
4,903
6,093
• Cellular and Fixed Data developing well in 3Q compared to same period last year
PT Indosat Tbk – 9M 2015 Results
Segment Revenue Overview
3Q-15
5,321
6,527
Operating Revenue Breakdown
5,768
6,962
Voice
SMS
Data
VAS
8.5%
3Q15 YoY
16.3%
64.6%
14.4%
6.5%
3Q15 QoQ
13.3%
13.0%
-3.6% Increased VAS usage from various gaming & content packages
- Migration to data continues to impact voice and SMS usage and revenues
- Voice and SMS usage increased during fasting month and Eid Al-Fitr celebration
Increased data usage from attractive data offerings related to fasting month and Eid Al-Fitr celebration
Cellular Revenue Performance
PT Indosat Tbk – 9M 2015 Results
Cellular Customer Base
54.9 54.2
63.2 66.5 68.5 69.0
1Q-15
+27.3% YoY +0.7% QoQ
4Q-14 3Q-14 2Q-14
Number of cellular customers in million
1Q-15 4Q-14 3Q-14 2Q-14
in million
-4.8
-0.7
9.0
3.3 2.0
0.5
2Q-15 2Q-15
Net cellular customers additions
• Significant customer additions in the past 4 quarters due to aggressive acquisition campaigns following improved network quality perception
PT Indosat Tbk – 9M 2015 Results
3Q-15 3Q-15
PT Indosat Tbk – 9M 2015 Results
Improving ARPU
ARPU and ARPM Voice Traffic and MOU
• ARPU has improved in 3Q15 but declining since 3Q14 in line with increasing customer base • MOU and voice traffic improving due to festivity in 3Q15
80 78 78
67 67 70
143 148 142 140 145 143
13.6 13.1 13.6 13.2 13.5 14.6
+11.6% YoY
1Q-15
+8.4% QoQ
4Q-14 3Q-14 2Q-14
Voice Traffic
in billion minutes (Voice Traffic)
in minute/subscriber (MOU)
MOU
26.6 28.3 28.0 24.0 25.3 26.9
4Q-14 3Q-14 2Q-14
+6.5% QoQ -4.9% YoY
1Q-15
ARPU
in thousand IDR (ARPU)
ARPM
2Q-15 12-15 3Q-15 3Q-15
in IDR (ARPM)
Data Usage SMS Delivered
Strong Data Usage
• Growing number of data users in line with Company’s strategy to acquire customers through data offering stimulated by an improved network
61 57 59 56 60 62
19,185 20,911
29,891
39,880 46,027
55,871
in TByte
+21.4% QoQ +167.2% YoY
1Q-15 4Q-14 3Q-14 2Q-14
in billion
+8.1% YoY
1Q-15 4Q-14
+3.3% QoQ
3Q-14 2Q-14 2Q-15 2Q-15
PT Indosat Tbk – 9M 2015 Results
3Q-15 3Q-15
Operational expenses
PT Indosat Tbk – 9M 2015 Results
• Moderated operational expenses • Impact from accelerated Depreciation has been reflected in 2014
Cost of Service (CoS)
Depreciation and Amortization
Personnel
Marketing
as percentage of revenue
General and Administration
Total Expenses
Total Operating Expenses
2Q-14*
43.4%
33.6%
7.4%
3.6%
4.1%
115.5%
58.6%
3Q-14*
42.7%
33.4%
7.4%
4.9%
3.0%
91.4%
58.0%
Provision for Legal Case 23.3%
4Q-14*
45.2%
35.1%
6.9%
5.9%
3.8%
96.8%
61.7%
1Q-15
42.9%
33.9%
7.4%
3.0%
3.8%
91.2%
57.3%
2Q-15
42.1%
32.2%
6.9%
4.6%
4.2%
89.9%
57.7%
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
3Q-15
40.5%
29.8%
6.8%
3.8%
2.9%
83.8%
54.0%
EBITDA performance
EBITDA and EBITDA margin
2,420 2,567 2,440 2,604 2,758 3,205
+16.2% QoQ +29.4% YoY
1Q-15 4Q-14* 3Q-14* 2Q-14*
EBITDA
in IDR billion
EBITDA Margin
41.4% 42.0% 38.3%
42.7%
2Q-15
• 3Q15 EBITDA margin improved • Revenue development improving with
continued good cost management
PT Indosat Tbk – 9M 2015 Results
3Q-15
42.3%
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
46.0%
-1,122
Net profit Normalized net loss bridge
Normalized net profit
• 9M15 net loss still impacted mainly by IDR depreciation
-1,766
-1,330
-1,122
-15.6% YoY -24.7% YoY
9M-15 9M-14* 9M-13
in IDR billion in IDR billion 9M-15
Normalized Net –
FX Loss
Reported
PT Indosat Tbk – 9M 2015 Results
-1,457
334
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
2.42 2.57
2.45
Balance sheet
Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA
PT Indosat Tbk – 9M 2015 Results
• Total debt increased due to Rupiah depreciation • Reducing US debt portion is progressing
* IDR 3.79tn, IDR 3.95tn and IDR 4.24tn of obligation under finance lease are included in 9M13, 9M14 and 9M15 respectively
26,225 25,676 27,002
2.21 2.33
2.11
23,916 23,339 23,273
9M-14 9M-13 9M-15
+5.2% YoY
Gross Debt
in IDR billion
Gross Debt/EBITDA
9M-15 9M-13 9M-14
-0.3% YoY
Net Debt Net Debt/EBITDA
in IDR billion
Free cash flow & Capex
Free cash flow Capex and Capex/Revenue
PT Indosat Tbk – 9M 2015 Results
• FCF YTD strengthening with improved operating CF generation • Capex stays within guidance
in IDR billion
876
356
-206
481
1,096 1,051
1Q-15 4Q-14 3Q-14 2Q-14
1Q-15 4Q-14 3Q-14 2Q-14
Capex
in IDR billion
Capex/Revenue 2Q-15
2Q-15
28.6 25.7 25.4
23.2 21.1
26.8
3Q-15
3Q-15
1,669 1,566 1,618 1,414 1,372
1,869
Network & Data User
Number of BTS Data User
PT Indosat Tbk – 9M 2015 Results
• Strong network performance in already modernized areas • 4G LTE roll out is in progress
20,585 21,420 22,166 22,212 22,902 23,525
13,328 15,962 18,063 18,544 20,067 22,671
+7.5 QoQ +23.6% YoY
1Q-15 4Q-14 3Q-14 2Q-14
2G 3G
In million
33,913 37,382
2Q-15
40,229 40,756
3Q-15
42,969 46,196
1Q-15 4Q-14 3Q-14 2Q-14 2Q-15 3Q-15
26.3 25.5 29.1 29.5 30.1
32.2
+7.1 QoQ +26.3% YoY
3Q in summary
PT Indosat Tbk – 9M 2015 Results
Management Focus and Key Updates
PT Indosat Tbk – 9M 2015 Results
Our Focus
Develop adjacent and new businesses
Increase cost efficiencies enabling continued investments
Improve monetization on the strong growth of data users and increasing traffic
Leverage modernized network and improved customer experience driving revenue growth
LTE roll out to further enhance data experience
PT Indosat Tbk – 9M 2015 Results
2015 Guidance
PT Indosat Tbk – 9M 2015 Results
FY 2014 Actual FY 2015 Guidance
Consolidated Revenue Growth 1.0% In line with market
EBITDA Margin* 41.7% Low to Mid 40’s
Cash CAPEX IDR 6.4 trillion IDR 6.5 - 7.5 trillion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
Thank you
PT Indosat Tbk – 9M 2015 Results
Investor Relations & Corporate Secretary Jl. Medan Merdeka Barat No. 21 Jakarta - 10110 Tel: +62 21 30442615 [email protected]
• PT Indosat Tbk ( “Indosat” or “Company” ) cautions investors that certain statements contained in this document state its management's intentions, hopes, beliefs, expectations, or predictions of the future are forward-looking statements
• The Company wishes to caution the reader that forward-looking statements are not historical facts and are only estimates or predictions. Actual results may differ materially from those projected as a result of risks and uncertainties including, but not limited to:
• The Company’s ability to manage domestic and international growth and maintain a high level of customer service
• Future sales growth
• Market acceptance of the Company’s product and service offerings
• The Company’s ability to secure adequate financing or equity capital to fund our operations
• Network expansion
• Performance of the Company’s network and equipment
• The Company’s ability to enter into strategic alliances or transactions
• Cooperation of incumbent local exchange carriers in provisioning lines and interconnecting our equipment
• Regulatory approval processes
• Changes in technology
• Price competition
• Other market conditions and associated risks
• The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information, or otherwise
• Please be also advised that the information provided herein are merely issued to coincide with the release of Ooredoo QSC (formerly known as Qatar Telecom QSC) results for the year ended 31 December 2013, as the Company’s indirect majority shareholder that consolidates Indosat’s results in its financial statements. Subject to the completion of, including but not limited to the audit by the Public Accountant Firm on the Company’s consolidated financial statements which are prepared in accordance with the Indonesian Financial Accounting Standards (IFAS), Indosat expects to file and release its consolidated financial statements for the year ended 31 December 2013 on 30 April 2014 at the latest (“Indosat’s Official Release”). Accordingly, the information provided herein may differ from what is contained in Indosat's Official Release.
Disclaimer
PT Indosat Tbk – 9M 2015 Results
Supplemental Information
PT Indosat Tbk – 9M 2015 Results
IM2 case development
PT Indosat Tbk – 9M 2015 Results
On September 16, 2014, the South Jakarta Attorney Office (“Kejaksaan Negeri
Jakarta Selatan”), without preliminary notification, executed the Supreme
Court’s Decision on Mr. Indar Atmanto. The execution was done based on a
quotation of the Supreme Court’s Decision, which states, among others, that (i)
Mr. Indar Atmanto is found guilty and sentenced to eight years imprisonment
and charged with penalty of Rp300,000,000,- (if the penalty is not paid, Mr.
Indar Atmanto would serve an additional six months imprisonment), and (ii)
IM2 pay the losses sustained by the State amounting to
Rp1,358,343,346,674,-.
Subsequently, on January 16, 2015, Mr.Indar Atmanto and/or his lawyer or IM2
received the document on the Supreme Court’s decision regarding the litigation
case. As of the issuance date of the consolidated financial statements, Mr.
Indar Atmanto and IM2 plan to conduct further legal act by submitting a
reconsideration request peninjauan kembali (”PK”).
On March 16, 2015, Mr. Indar Atmanto’s submission of Judicial Review
[Peninjauan Kembali (”PK”)] was officially registered at the Corruption Court
under No. 08/AKTA.PID.SUS/PK/TPK/2015/PN.Jkt.Pst.
On November 4, 2015, the Supreme Court’s official website announced that
the Judicial Review filed by Mr. Indar Atmanto was rejected based on Supreme
Court’s decision dated October 20, 2015. However, no detailed information
regarding the exact content of such Supreme Court’s decision was available.
As of the issuance date of the interim consolidated financial statements, the
official copy of such Supreme Court’s decision hasn’t been received.
Credit ratings
PT Indosat Tbk – 9M 2015 Results
On 25 May 2015, Standard and Poor’s (“S&P”) revised its outlook on eight Indonesian companies and two Indonesian financial institutions to positive from stable. They revised the outlook on Indosat to reflect the prospect for exceptional support from Ooredoo Q.S.C. following the outlook revision on the sovereign credit rating on Indonesia. They consider Indosat to be a strategically important subsidiary of its parent but they do not consider parental support as a basis for a rating above the sovereign foreign currency rating for strategically important subsidiaries.
On 28 September 2015, PEFINDO has affirmed its “idAAA” ratings for PT Indosat Tbk
(ISAT) and its Shelf-Registered Bond I/2014-2016, Bonds V/2007 Serie B, Bonds VII/2009
Serie B, and Bonds VIII/2012. PEFINDO has also affirmed its “idAAA(sy)” ratings for
ISAT’s Sukuk Ijarah I/2014-2016, Sukuk Ijarah IV/2009 Serie B, and Sukuk Ijarah V/2012.
The outlook for the corporate rating is “stable”. The ratings reflect ISAT’s strong support
from its majority shareholder, strong market position, and stable operating performance.
On 1 April 2015, Moody's Investors Service says that PT Indosat Tbk's (Ba1 stable)
overall FY2014 financial performance is in line with expectations, with an improved
operating performance in the second half of the year offsetting a weaker first half.
On 5 May 2015: Fitch Ratings Indonesia has assigned National Long-Term Ratings of
'AAA(idn)' to PT Indosat Tbk's (Indosat; BBB/AAA(idn)/Stable) IDR1.75trn senior
unsecured bonds and IDR250bn sukuk ijarah issues. The issues are from Indosat’s
IDR9trn bond programme and IDR1trn sukuk ijarah programme - affirmed at 'AAA(idn)' on
27 March 2015 - and are consequently rated at the same level as the programmes.
Debt maturity profile*
PT Indosat Tbk – 9M 2015 Results
In IDR trillion
2019 2018 2022 2017 2016 2015
IDR
USD in IDR
2021 2025
Number of BTS
* Excluding obligation under capital lease
0.20 1.64
4.25
1.03 0.30
1.00
3.98
2.88
1.36 2.27
0.65 0.36
1.88 0.36 0.60
2020 2024
Spectrum overview
PT Indosat Tbk – 9M 2015 Results
Number of BTS
10.0
900 Mhz
7.5
7.5
Indosat
Telkomsel
XL Axiata
20.0
1800 Mhz
22.5
22.5
10.0
2100 Mhz
15.0
15.0
in Mhz
Hutchison - 10.0 10.0
2.5
850 Mhz
3.5 – 5.0*
-
-
* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas
15.0**
2300 Mhz
15.0**
-
-
** Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku